Is Liquidity Mining Worth It?

Liquidity mining is one of DeFi’s most popular investment income-earning opportunities. The reason for that is the high APYs often paid (in protocol tokens) by decentralized trading pools. After all, crypto traders and investors are deploying capital in the DeFi markets to make money.

Newer, less established decentralized trading protocols often pay higher liquidity mining rewards than their more established counterparts. However, they are often run by anonymous teams and don’t always have audited smart contracts, opening up the possibility of rug pulls or smart contract hacks.

But even mining liquidity on more established DeFi protocols carries a significant amount of risk, ranging from impermanent loss to the compression of yields, which can result in significant losses.

While liquidity mining can be a very lucrative venture, it requires a deep understanding of the DeFi markets and decentralized trading, making it unsuitable for beginners or crypto investors with a low risk tolerance.

ref: https://unchainedcrypto.com/what-is-liquidity-mining/